• Boosts HHS Funding & Extends Sequestration to 2023

On Monday, March 28th, President Biden released a $5.8 trillion proposed budget for fiscal year (FY) 2023, which begins October 1st, 2022. While the White House budget is simply a request and Congress has final say on government spending, it does provide a window into the president’s priorities and where his administration wants to direct its efforts going forward. As a reminder, lawmakers just this month finalized spending for the current fiscal year — which runs through Sept. 30 — and will soon begin negotiating funding legislation for FY2023. 

The budget requests more than $127 billion to fund the Department of Health and Human Services (HHS) in FY2023, a roughly 15 percent spike from 2022 funding that includes major increases for pandemic preparedness and public health surveillance. Notably, the budget also would extend the Medicare sequester cuts by one year until 2032 (they were previously extended through 2031 by The Infrastructure Investment and Jobs Act of 2021), which would provide savings of around $7.6 billion.  

Over the coming weeks members of the Executive Branch will be testifying before key committees in the House and Senate to provide additional detail around the recommendations put forth in the budget documents. As additional relevant detail is made available, it will be covered in NAHC Report.  

Provisions of interest in the Budget include: 

Medicare: 

Multiple provider types: 

• Extension of the Medicare sequestration provider rate cuts through 2032 (they are currently in place through 2031) 

Home Health: 

• Standardize Data Collection to Improve Quality and Promote Equitable Care: Current law requires post-acute providers (inpatient rehabilitation facilities, long-term care hospitals, skilled nursing facilities, and home health agencies) to report standardized patient assessment data on five health assessment categories, as well as “other categories deemed necessary and appropriate by the Secretary.” However, there is no express statutory requirement for data reporting on social determinants of health. This proposal would add a new category of standardized patient assessment data, “drivers of health”, for post-acute care providers. These data could include, for example, transportation, housing, social isolation, and food insecurity. This new data would enable real-time information exchange between the healthcare system and those resources best equipped to address individual needs—activating government, community agencies, and healthcare providers to work together to support individuals of underserved populations and be responsive to respond to public health needs. 

Health Care Workforce 

• Requests a total of $2.1 billion for numerous Health Resources and Services Administration (HRSA) workforce programs—including $430 million in mandatory and other sources of funding—an increase of $324 million above FY 2022 enacted, including additional investment to support the resiliency, mental health, and well-being of health care providers. 

Program Integrity and Oversight Efforts: 

• Requests $899 million in discretionary funding for the Health Care Fraud and Abuse Control (HCFAC) program, $26 million above the FY 2022 enacted level ($692.2 million for CMS; $109.6 million for the HHS OIG; $97.2 million for DOJ) (this would be on top of the $1.4 billion in mandatory HCFAC resources for FY 2023) 
• Mentions that CMS would use some of this money to invest in new advancements in predictive modeling and artificial intelligence to enhance existing efforts to reduce improper payments, prevent fraud, and target bad actors, while limiting burden. For example, CMS is exploring methods of using machine learning to conduct more rapid review of chart documentation to improve payment accuracy. 
• Mentions that a top priority for this increased investment is Medicare medical review, and that CMS has a long-term goal to increase the percentage of fee-for-service claims subject to medical review, which currently stands at less than one-tenth of one percent, to one percent. 
• Prohibit Unsolicited Medicare Beneficiary Contacts: Since the start of the COVID-19 pandemic, Medicare scams have proliferated that utilize unsolicited contacts with Medicare beneficiaries for the purpose of ordering or rendering high-cost items and services, such as medically unnecessary laboratory testing and COVID-19 personal protective equipment, as well as to collect beneficiaries’ personal information. This proposal would disallow certain ordering or referring providers, home health agencies, laboratories, other providers and suppliers as identified by the Secretary, and other individuals or entities acting on behalf of such providers and suppliers from making certain unsolicited contacts with Medicare beneficiaries. Prohibited contacts would include phone calls, text messages, direct messaging applications, and e-mail. The proposal would also grant the Secretary authority to announce rulemaking to modify the parameters restricting unsolicited provider contacts with beneficiaries to address emerging fraud threats CMS identifies in the future. 
• Expand Tools to Identify and Investigate Fraud in the Medicare Advantage Program: This proposal would require Medicare Advantage plans to collect referring provider identifiers for healthcare services and report this information as part of encounter data submissions to CMS. By requiring Medicare Advantage Organizations to collect key provider data to assist with investigations, this proposal would provide CMS and the HHS-OIG with improved capabilities to hold wrongdoers accountable. CMS would have improved capabilities to prevent program losses and beneficiary harm. Medicare Advantage Organizations would benefit from more actionable data in their own systems and the Federal Government’s broader visibility into fraud affecting multiple plans. This proposal would not require additional funding. 

Health Equity: 

• Improving Equity in Medicare and Medicaid Programs: Requests $35 million for CMS to invest in a new initiative to systematically identify and resolve barriers to equity in each CMS program through research, data collection and analysis, stakeholder engagement, building upon rural health equity efforts, and technical assistance. 
• Increase Social Security Administration Sharing and Collection of Race and Ethnicity Data for Medicare Beneficiaries: The primary source of race and ethnicity data on Medicare beneficiaries has been the Social Security Administration (SSA). Currently, SSA collects limited race and ethnicity data on some Medicare beneficiaries and does not collect any data on other beneficiaries, which hinders CMS’s ability to identify and reduce health disparities. The current collection of race and ethnicity data complies with certain 1997 OMB guidelines but does not comply with the more expansive 2011 HHS Data Standards that, for example, provide more detail on the diversity of Asian populations in the United States, such as Chinese, Vietnamese, and Filipino. This administrative proposal would have SSA increase sharing of race and ethnicity data with CMS for current and prospective Medicare beneficiaries, and consider expanding collection of detailed data, e.g., at 2011 HHS data standards or newer data standards. CMS will assist by conducting appropriate research and user testing for collection of this data to ensure it is useful for the purposes of tracking disparities in healthcare treatment and outcomes by race and ethnicity. 

Surveys and Certifications (Medicare & Medicaid) 

• Requests $494 million for Survey and Certification, an increase of $97 million or 24 percent above FY 2022 enacted. This investment will strengthen health, quality, and safety oversight for approximately 67,000 participating Medicare or Medicaid provider facilities. Survey workloads and costs continue to increase due to factors such as a growing number of beneficiaries and surveyor wage growth, as well as an increase in serious complaints against facilities, which can lead to costly ongoing enforcement activities once a deficiency is identified. The COVID-19 pandemic has underscored the Survey and Certification program’s critical oversight role for holding nursing homes and other facilities accountable to meet minimum infection control standards and protect public health for beneficiaries in these facilities from COVID-19. 

• At the FY 2023 request level, CMS projects that states will have the resources to fully complete surveys for all provider types, including complaint surveys, statutorily required surveys, and non-statutory surveys. This level of survey completion, which has not been projected since the submission of the FY 2017 President’s Budget, would permit the program to provide oversight for the relevant facility types and is the first step in shifting from a reactive to proactive posture. 

Department of Labor (DoL) 

• Priorities for DoL Rulemaking: In FY 2023, the Occupational Safety & Health Administration (OSHA) is planning to publish five final rules, seven proposed rules, and complete one Small Business Regulatory Enforcement Fairness Act panel. The highest priorities among the rulemaking projects on the agency’s regulatory agenda include Infectious Disease, Workplace Violence, Hazard Communications, Personal Protective Equipment (PPE) Fit, and Heat Illness Prevention. 
• Increased Funding for OSHA Inspections and Staff: An increased funding request of $27,876,000 to strengthen OSHA’s enforcement program. This includes funding to hire 179 Compliance Safety and Health Officers (CSHOs) to carry out front line compliance inspections. OSHA also plans to create 10 specialized technical CSHO positions to address highly technical inspections across the nation, such as process safety management, electrical safety, ergonomic hazards, combustible dust, and biohazards/infectious diseases, such as COVID-19. The Administration has previously stated its commitment to double the number of OSHA inspectors by the end of President Biden’s first term. 
• Increased funding for DoL’s Wage and Hour Division (WHD) Enforcement: A $61 million increase for WHD’s budget to combat worker misclassification, protect essential workers by safeguarding their pay and recovering back wages, and more fully enforce rules around other areas such as prevailing wages and family and medical leave. 

Health Information Technology 

• The budget directs $52 million at the program level for the Office of the National Coordinator for Health Information Technology (ONC) towards improving standards to increase interoperability and equity among various health IT activities, in coordination with industry-led standards development organizations, as well as using the resources for fulfilling unmet legislative requirements. 

CMS Data 

• Improve CMS Analytic Capabilities and Data Sharing: As the largest payer for healthcare in the United States, CMS holds an enormous amount of unique health data on a large proportion of the U.S. population. The budget invests $15 million in a new initiative to improve the accessibility, timeliness, and comprehensiveness of CMS data made available to stakeholders and the public. This increase in funding will lead to greater analytic and data sharing capabilities while also continuing to safeguard individual privacy. Better, more timely use of these datasets holds the potential to strengthen the evaluation of federal and state programs, assess the impact of policy changes, improve outcomes of people served by multiple programs, and generate knowledge to inform federal and state policymaking. 

HIPAA 

• Enhancing HIPAA Protections by Increasing Civil Monetary Penalty Caps and Authorizing Injunctive Relief: The proposal seeks to increase the amount of civil money penalties that can be imposed in a calendar year for HIPAA non-compliance and authorizes OCR to work with the U.S. Department of Justice to seek injunctive relief in federal court for HIPAA violations.  

Administration for Community Living (Funding for aging and disability community-based-organizations) 

• Provides $3.1 billion for ACL, an increase of $668 million above FY 2022 enacted. The budget recognizes the significantly increased demand for critical services caused by growing populations and the long-term effects of the COVID-19 pandemic.  

• In FY 2023, the budget provides $266 million, an increase of $61 million above FY 2022 enacted, for the Family Caregivers and Native American Caregiver Support programs, and nearly doubles funding, from $8 million to $14 million, for the Lifespan Respite Care program. These programs provide more than 1.5 million caregivers counseling, training, respite care, and other coordinated services to allow them to support their loved ones while maintaining their own health and well-being. 

Mental Health Care 

• Improve access to Medicare mental health services by allowing Licensed Professional Counselors and Marriage and Family Therapists to directly bill Medicare for their services; removing limits on the scope of services for which Clinical Social Workers, Licensed Professional Counselors, and Marriage and Family Therapists can be paid by Medicare; allow these practitioners to bill Medicare directly for their mental health services for covered Part A qualifying Skilled Nursing Facility stays; establish Medicare payment under Part B for services provided under an Assertive Community Treatment delivery system; allow payment to Rural Health Clinics and Federally Qualified Health Centers for Licensed Professional Counselors and Marriage and Family Therapists providing mental health services; and enable Medicare coverage of evidence-based digital applications and platforms that facilitate the delivery of mental health services. 

Community Health Workers: 

• Add Medicare Coverage of Services Furnished by Community Health Workers: Under current law, services provided by community health workers are not paid under Medicare. This proposal would provide coverage and reimbursement to community health workers acting within the scope of their license or certification under Medicare’s Physician Fee Schedule for select, evidence-based preventive, chronic, and behavioral care management services, as well as certain social determinants of health evaluation and navigation services, effective CY 2024. Such services would be exempt from Medicare cost-sharing. Services must be furnished under the direction of—and billed by—a Medicare-enrolled supplier or provider in accordance with a comprehensive community needs assessment and engagement plan. In addition to existing Medicare providers, the Secretary would be permitted to enroll community-based organizations (e.g., non-profits, public health departments, etc.) as community health worker suppliers to broaden access to services, subject to program integrity and patient safety guardrails. 

Agency for Healthcare Research and Quality (AHRQ) 

• All-Payer Claims Database: Provides $5 million to develop the infrastructure to regularly create and disseminate an All-Payers Claims Database. AHRQ will partner with states and other data holders to create a framework for a secure claims database that will enhance value to individual participating states and provide analytics to federal policy makers to inform decision making, address equity issues, and improve healthcare quality. 

• Telehealth Centers for Excellence: The establishment of two Centers of Excellence in Telehealth Implementation. These centers will play a role in evaluating the effects of telehealth on healthcare delivery and health outcomes to ensure the promise of telehealth is delivered through evidence-based practice and policy. This work is especially important given the rapid expansion of telehealth during the COVID-19 pandemic, which created both historic opportunities and unique challenges. With this unprecedented rapid expansion of telehealth, it is important to understand telehealth’s effect on key health policy priorities and thoroughly evaluate the effect of the telehealth on healthcare quality, safety, equity, access, utilization, and value.